 (Updated: 25/06/2000)  N.B. Above Chart is abstracted from Metastock Program Last week we said that,"So long as Dow Jones does not break below 10400-10300 on close basis, the consolidating phase shall remain intact. However, if the 10300 is broken decisively than we may be heading for another big trouble! And this could be another big sell off in the global stock markets." Dow Jones did continue to move down last week, but closed at 10404.80 last Friday. This is still within our support of 10400-10300 level, hence it is still considered safe for the timebeing. As for STI, last week was pretty boring and was trading on a tight range for most of the time. However, the good news is that STI was trading side ways in the range of 2100-1980 instead of 2000-1900 as per our last week commentary. This had certainly shown some strength in our index and is now waiting for some big events to happen so that it can propel further. Our last week's commentary on Sesdaq was right to the dot too, we said "Sesdaq will also drift lower and consolidate within the range of 100-105 next week." Indeed it had moved down to our expectation and consolidate within the 105 area. So, what will happen next week? Will the market rally after the Fed meeting? If not, when can we see a return on our long awaited bull market? Last week we had witnessed two events happened in US market.
First, Nasdaq did make an attempt to break above major resistance at 4000 but eventually
failed to sustain and dropped below the psychological 4000 level. Second, although Dow
Jones did manage to hold on last Friday while Nasdaq was meeting with big sell off, Dow
Jones had been creating lower high and lower low almost every days of last week. This has
caused us some concerned. We continue to hold our view that, if Dow Jones is unable to
hold its major support at 10400-10300 level next week, than we may see a big sell off in
the global market. In this case, we are seeing Dow Jones heading for 9800 and Nasdaq to
test its recent low again. If this scenario does happen, than STI may eventually
head for 1700 but the probability for such event is relatively low. So do monitor the
movement of Dow Jones carefully next week to get the latest clue for our market. Expect
STI to remain sideways for the early part of next week, but will make some big moves
towards middle to end next week. If it can break above 2220 then a summer rally may be
about to begin (which may kick start at the launch of STI futures index on 28/6). However,
if it beaks below 1900, then a big sell off may occur before a meaningful rally emerges.
As for Sesdaq, expect it to trade within the 110-100 level next week, only a break of this
range will set up the medium term trend for the index. We have to be patience and wait for
the market to tell us which direction (trend) it is heading to. So, do trade cautiously
until a clearer picture emerge.
We have finally cracked the long awaited 1970-1930 level, which signaled the beginning of an intermediate down trend in the coming months. This break down has now open up two possible long term scenarios, please check it out for our latest updating in the Long Term Perspective page. One of the possible Intermediate bottom may be at 1700, for it represent the 50% retracement from 800 to 2580. We shall discuss it more detail later.
Events To Watch For The Coming Weeks/Month .
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